FY24 disinvestment target to be around Rs 60K-cr, big ticket deals unlikely

The disinvestment target for the next financial year (FY24) may be fixed at Rs 50,000-60,000 crore as the Centre is unlikely to declare a new disinvestment transaction and focus on completing the ongoing deals, a report in the Financial Express (FE) said.

The report added that there may not be any big-ticket sale of public sector enterprises including banks and oil companies.

“Next year, we will pursue the transactions that have been approved (by the Cabinet) and are already in various stages. These include IDBI Bank, ConCor, BEML, Shipping Corporation of India, NMDC Steel, HLL Lifecare and PDIL,” Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey told FE.

In her Budget 2021 speech, finance minister Nirmala Sitharaman said that the Centre will privatise two public sector banks and one general insurance company. However, little progress has been made on that front. The government has not introduced any privatisation bill in the recent Winter Session.

However, the government is working on privatising IDBI Bank. According to a recent report in the Business Standard, Pandey said that the government had received interest from both global and domestic investors to acquire a majority stake in the bank. The government is looking to sell a 30.48 per cent stake, while the LIC is planning to sell a 30.24 per cent stake, aggregating to 60.72 per cent of the equity share capital of IDBI Bank. After this stake sale, the combined shareholding of LIC and the government will come down to 34 per cent.

According to analysts, the government’s decision to not list any new entity for privatisation may be because of the prevailing market conditions. A sell-off bid at this point may not generate good proceeds.

The report added that the disinvestment target of Rs 65,000 crore for FY23 would likely be missed by a “significant margin”.